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Definition
Refinancing means taking out a new loan to repay an existing one, typically to improve the rate, term or flexibility. It differs from consolidation, which combines several debts rather than replacing one.
Why it matters
Refinancing pays only when the new loan beats the old one net of switching fees. See refinancing a business loan and how to refinance.
Related reading
Refinancing a business loan: replacing debt on better terms
Refinancing swaps an existing loan for a new one, ideally cheaper or more flexible. It can cut your rate,…
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How to refinance a business loan
Refinancing pays only when the new loan beats the old one net of costs. The method is simple arithmetic: what…
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Debt consolidation
Replacing several business debts with a single new facility, to simplify repayments and, where the terms are…
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Early settlement charge
A fee some lenders apply when a loan is repaid before the end of its term, potentially offsetting the…
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